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Federal prosecutors and regulators announced actions Wednesday against the owner of a New York investment fund accused of committing a $21 million investment fraud scheme.

From 2014 to March of this year, Brent Borland allegedly raised $21.9 million from approximately 40 investors for his Belize Infrastructure Fund. The investors were told the money was going to build the Placencia International Airport in the Central American country. According to prosecutors, Borland promised high rates of return on the funds, which were fully secured by real property in Belize that was free of any liens or obligations.

“In reality, some of the real property investors were told secured debt did not even exist; and Borland allegedly was using their money for personal expenses, such as luxury automobiles, a beach club membership, and private school tuition for his children,” U.S. Attorney Geoffrey Berman of the Southern District of New York said in a statement. “Cases such as this serve as a cautionary tale for investors—always carefully vet your investments—and if something seems too good to be true, it probably is.”

According to officials, all of the investors ultimately lost money in the transaction. One investor who sued Borland after purchasing a $1 million note in the fund received only approximately $400,000 as a result of the court action.

In its criminal complaint, the government alleged that Borland diverted more than $7.5 million of the funds he acquired for personal use. At least $1.75 million went to pay the mortgage on Borland's Florida home. Another $25,000 went to pay for a Mercedes-Benz G 63 registered in Borland's name, while $31,000 of the funds were spent at Bloomingdale's and $10,000 was used at a store called “Luxury of Watches.” More than $183,000 was withdrawn as cash from Borland's account.

The U.S. Securities and Exchange Commission also announced charges against Borland in the matter. The SEC also announced Borland's wife, Allan LaTorra Borland and a corporation controlled by the couple as relief defendants.

Ellenoff Grossman & Schole partners Matthew Baum and David Gehn are representing Borland. Neither responded to a request for comment.

According to the U.S. Attorney's Office, Borland was arrested on Wednesday and appeared before U.S. Magistrate Judge Barbara Moses of the Southern District of New York.